Breitling Energy Corp. (OTC: BECC) entered a farm-out agreement with Steller Energy & Investment Corp. to explore and develop nearly 3,680 acres in Sterling County, Texas, the company said Feb. 20. Steller Energy had previously entered into an exploration and development agreement for the same acreage, with Clayton Williams Energy Inc. (NYSE: CWEI), Breitling noted.
Under the farm-out, Breitling will follow Steller Energy’s obligations, the company added, noting that it will earn a 100% working interest in each well drilled, along with surrounding acreage. If at least eight wells are drilled, full working interest in the entire acreage will be retained, Breitling said.
The acreage, in the county’s northwest, has multiple pay zones, the company said. Wells drilled in or near it have produced from the Lower Wolfcamp Lime, Canyon Sand, Mississippi Chert and Lime, Fusselman Lime, Montoya Lime and Ellenburger Dolomite areas, the company added.
Chris Faulkner, Breitling’s CEO, said "This is a great addition to the growing reserves of Breitling, and an overall fit to our business plan."
"This Permian Basin acreage should allow Breitling to continue with its goal of adding additional liquids production to enhance its stakeholder value," he added.
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